The structure of the paper is as follows. Section 2 presents a theoretical model about the
labor market behavior of over-employed workers. The empirical model is presented in section
3. Section 4 describes the data and presents some stylized facts. In section 5 the results of the
empirical analysis are presented, which illustrate that hours constraints may affect the labor
participation decision of older workers if possibilities to adjust hours within the labor market
are relatively limited. Section 6 focuses attention on the effects of increased working hours
flexibility on total labor supply. Finally, section 7 provides a conclusion.